Distressed investment funds on the increase
In a sign of the times it has been revealed that a number of "distressed investment funds" have taken substantial stakes in some of the U.K.'s best-known companies. One such company is JJB Sports where Crystal Amber, an activist fund, has taken a near 15% stake in the troubled sports retailer over last few days. This is a situation which has and will be repeated across the UK economy as another extension on the downside offers opportunities to those willing to take some degree of risk.
Activist funds are generally regarded as "movers and shakers" who take stakes in businesses which they believe can be turned round and sold on for significant profit. While there is no doubt there is some value in the UK stock market, and others around the world, the general feeling of concern regarding swine flu and money market rates in the short to medium term has depressed many share prices.
One element of a recovery in the UK stock market and the UK economy would be an increase in corporate activity, takeovers and mergers. As yet we have seen nothing concrete on this particular front although retailer Alexon recently received a bid approach from an unnamed third party.
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